Question

HUD, Co. had a beginning retained earnings of $29,240. For the year, the company had net income of $6,015 and paid dividends of $2,265. The company also issued $4,015 in new stock during the year. What is the ending retained earnings balance?

Answer 1

Ending Retained Earnings Balance $32 990

Step-by-step explanation:

Retained earnings is the profit that is kept in the business after distributing income to shareholders in a form of dividends and can be calculated by

Retained Earnings = Net Income - Dividends

Opening Retained Earnings $29240

During the Year Net income $6015

Paid Dividends = $2,265

Retained Eranings for the Year = 6015-2265 =$3750

Ending balance of retained earnings

29240+3750

=$32990

Answer 2

$32,990

Step-by-step explanation:

The retained earnings is the accumulated balance of the net income/loss of n entity over time less the dividends paid over the years. Mathematically,

Opening retained earnings + net income - dividend paid = closing retained earnings

Both the retained earnings and common shares are elements of the owners equity.

$29,240 + $6,015 - $2,265 = ending retained earnings

Ending retained earnings

= $32,990